In addition, another macro factor to consider is how the COVID-19 pandemic has changed, in some cases, permanently changed, how people live and work. These issues would impact the performance of such key sectors as health care, biotechnology, real estate, among others, he said.
In addressing Janus Henderson's recently released results for the first quarter ended March 31 — in which the asset manager recorded $5.5 billion in net inflows, the first such quarter of net inflows in more than five years — Mr. Dibadj said he was pleased with the results, but cautioned that "one quarter does not a trend make."
However, it is the increased cost of capital that might be the most important factor for investors to consider now, he said, noting that for the past 10 or 15 years, as interest rates had been very low, companies could borrow money freely.
But now, Mr. Dibadj warned, that era of free money is over and investors will have to start differentiating between the good and bad companies in this new climate of higher costs as the market faces a reckoning.
Innovative companies will likely outperform in the coming years, he added, and the corporate landscape will be divided between the haves and have-nots.
Higher interest rates, which have led to higher yields, have also caused a big "rotation into fixed income," Mr. Dibadj said, even among investors and clients who previously regarded fixed-income investments as "irrelevant."
With respect to private assets and alternative assets, Mr Dibadj said this part of the investment industry has been undergoing an ongoing democratization whereby more and more retail investors are buying these asset classes. But he cautioned that private assets might not be right for everyone.
Finally, Mr. Dibadj said environmental, social and governance, or ESG, and sustainability, are "important financial aspects" of investing and that Janus has integrated ESG factors into its investment processes.
